Economic Crisis

Russian banking system needs a supervisory authority independent of the central bank. Retail banks should be prohibited from investing in non-liquid assets, while the liquid securities market should be saved for investors

Dutch disease is a very common condition among resource-rich nations but its effects on the body of the economy, as well as the potential cure, are always country-specific. What would it take for Russia, both politically and economically, to wean itself off the hydrocarbon windfall?

Transitional institutions cannot be effective unless economic agents are confident that the state will fulfill its commitments and that the rules of the game do not depend on the discretion of a ruler. Empirical evidence shows that democracy protects investors from expropriation better than dictatorships do, thereby resulting in faster economic growth.

Watching the drama of Russia’s private banks collapsing one by one naturally triggers fear: of more than 3,000 registered banks, about 2,600 have already lost their licenses. After the bailout of Otkritie and BIN, the government’s share in Russia’s banking system assets exceeds 80 percent. Fixing Russia’s banking system requires addressing the deep and systematic flaws in the central bank and the financial sector at large.

The Carnegie Moscow Center hosted a discussion on the changing global energy market at a time of abundant supply and high policy uncertainty, particularly in regards to American energy politics under the Trump administration.

Authors of more recent studies almost unanimously state that even though it’s unclear whether the resource curse generally menace on average over the group of resource-rich countries, it definitely threatens nations with weak institutions.

Having found itself in a lose-lose situation, the West will most probably do nothing—keeping sanctions in place and freezing the situation. The Kremlin will be happy. Russia won’t stop meddling in Ukraine or give up Crimea.